Competing Arizona bills target probate courts

Judges and lawyers back one, activists support the other

by Robert Anglen - Mar. 3, 2011 12:00 AMThe Arizona Republic

State lawmakers are weighing competing proposals that would reform Arizona's Probate Courts, and at least one stark choice confronts them: whether to create ongoing oversight of judges by the Legislature.

Both bills promise to change the way Probate Courts conduct business and rein in sometimes enormous fees charged by lawyers and private fiduciaries appointed to manage the care and finances of incapacitated adults.

Senate Bill 1499, supported by judges, fiduciaries and their lawyers, would impose new rules that would require fiduciaries to submit budgets, create fee guidelines, and require that services and costs benefit vulnerable adults under the court's protection.

It would leave all oversight of probate with the Arizona Supreme Court and individual judges. Judges have been criticized in recent years for allowing costs in cases to spiral out of control.

House Bill 2424, championed by a group of activists who say they were victimized by the system, would impose sharper mandates, including establishing limits on legal and fiduciary fees, requiring fiduciaries to provide a monthly accounting and subjecting judges to civil penalties for failing to protect a ward's rights.

It would create a legislative-review panel that takes citizen complaints and makes an annual report to the governor and other state officials. The panel would not have power to enact changes except to set minimum training standards for probate judges.

Some judges and lawyers worry the approach would politicize the judicial process. They also contend the bill was written partly to help heirs of Walt Disney who are embroiled in a bitter Probate Court battle.

Supporters of the competing House bill, which is sponsored by Rep. David Burnell Smith, D-Carefree, say it is the one that achieves real reform.

"Our bill works from the bottom up. Theirs is top down . . . and would keep total control in the court," said Laura Knaperek, a former state representative and co-author of the bill. "Our bill helps real people, and it fixes the problems in the court."

Both pieces of legislation follow an ongoing investigation by The Arizona Republic that found Maricopa County Probate Court for years has allowed the assets of some vulnerable adults to become cash generators for attorneys and fiduciaries. Judges charged with overseeing these cases rarely stepped in to limit or reduce fees, even when vulnerable adults ended up on state assistance programs.

The Supreme Court last year created a committee, composed of judges, lawyers, fiduciaries and citizens, to recommend reforms. Berch said that, outside of legislation, the court will carry out some reforms through its own rules.

The committee is chaired by Arizona Court of Appeals Judge Ann Timmer, who also supports the Senate bill, sponsored by Sen. John Nelson, R-Glendale.

Timmer said supporters of the Senate bill are willing to adopt new rules sought by supporters of the House bill in order to create the best possible bill.

For instance, a recent provision of the Senate bill was revised to require fiduciaries to submit a budget of anticipated expenses at the outset of any court appointment. Additional provisions require fiduciaries to notify the court of any cost overruns and impose penalties for the overruns.

Fiduciaries are sometimes appointed by the court to care for adults whom judges declare incapacitated. They help pay bills, coordinate medical care and manage a person's daily life.

Fiduciaries are required now to make an annual accounting, which is filed with the court for approval after the money has been spent. This means thousands of dollars are often spent before vulnerable adults or their representatives are aware of the costs. Some relatives of wards argue that many fees charged by fiduciaries and lawyers provide little or no benefit to the ward.

Davis said key goals of the bill are to allow wards to easily change fiduciaries and provide them better access to information.

One controversial provision would punish any person, including relatives of wards, who raised unnecessary objections or concerns about fiduciaries.

Under an "unreasonable conduct" clause, the court could impose remedies or sanctions against anyone who engaged in what the court determined was "vexatious" conduct. The court could prohibit individuals from participating in cases and order them to pay any costs incurred, including attorney fees.

Supporters say the purpose is to prevent people from repeatedly filing motions in court that could lead to expensive hearings and legal costs.

Opponents of the Senate bill say the provision would serve to muzzle valid complaints from relatives for fear of being fined. It's one reason fiduciaries support the bill, they say.

"This could be disastrous," said probate lawyer John Kitchell, who often serves as a court-appointed attorney for wards of the court. "I think we owe our wards some rights."

Kitchell, who helped write the competing House bill, said the provision would never be used against a fiduciary.

"This is a remedy that only applies to family members," Kitchell said.

Dennis Ball, who was involved in a probate case and has waged public protests against fiduciaries and the Probate Court, said the provision is proof that SB 1499 does not have the best interests of wards at its core.

"It is a bad bill and is supported by judicial insiders," said Ball, a spokesman for the Committee for Judicial Accountability, Reform and Justice, a group of about 20 members who have testified at legislative hearings and met with county and state prosecutors.In 2005, Ball objected in court to the care his mother received under the direction of Southwest Fiduciary, one of the Valley's biggest fiduciary firms.

The court found Ball's complaints were groundless. The judge ordered him to pay about $15,000 to Southwest's attorneys and to his mother's court-appointed attorney. Ball instead filed bankruptcy, legally dissolving the debt.

In response, attorneys for Southwest billed Ball's mother for the $15,000, an action approved by the judge.

The House bill, which Ball's group supports, would establish a panel to review citizens' complaints and develop minimum training standards for judges. The panel would consist of two public members and three probate attorneys appointed by the governor, the Senate president and the speaker of the House.

In addition, it would mandate a schedule of maximum fees that can be charged by fiduciaries and attorneys, create civil penalties for those who provide inaccurate information to the court and permit a ward to remove a fiduciary once a year.

Knaperek said she was hired by Brad Lund, grandson of Disney, to research and draft the proposed legislation. But she denies that the Lund family is attempting to influence their own case.

"They want to make sure what happens to them does not happen to anyone else," Knaperek said. "That's what this has always been about."

Brad Lund is at the center of a Probate Court petition filed by other relatives who allege his father, Valley real-estate developer Bill Lund, has sought to control his son's finances for his own benefit. Relatives, including Brad's twin sister, have asked the court to appoint an independent guardian. Bill and Brad have denied that Bill is attempting to control his son's wealth.

Brad says that the petition is unnecessary and that fighting it has cost him $1 million.